INTANGIBLE ASSETS AND GOODWILL:

Intangible Assets

Intangible assets as of December 31, 2017 and 2016 were as follows (dollars in thousands):



	2017							Weighted Average Amortization Period (in Years)
	Gross Carrying Amount		Accumulated Amortization			Intangible Assets, Net		Weighted Average Amortization Period (in Years)
Intangible assets:
Amortizable intangible assets:
Operational network rights	$	495,088	$	(13,260	)	$	481,828	92
Track access agreements	467,098		(91,059		)	376,039		41
Customer contracts and relationships	796,354		(100,621		)	695,733		24
Trade names/trademarks	13,296		(919		)	12,377		40
Favorable operating leases	2,441		(1,500		)	941		5
Total amortizable intangible assets	$	1,774,277	$	(207,359	)	$	1,566,918	46
Non-amortizable intangible assets:
Operating license						120
Total intangible assets, net						$	1,567,038



	2016							Weighted Average Amortization Period (in Years)
	Gross Carrying Amount		Accumulated Amortization			Intangible Assets, Net		Weighted Average Amortization Period (in Years)
Intangible assets:
Amortizable intangible assets:
Operational network rights	$	399,751	$	(7,050	)	$	392,701	100
Track access agreements	416,878		(72,442		)	344,436		43
Customer contracts and relationships	750,057		(63,520		)	686,537		24
Trade names/trademarks	11,888		(524		)	11,364		40
Favorable operating leases	2,210		(869		)	1,341		5
Total amortizable intangible assets	$	1,580,784	$	(144,405	)	$	1,436,379	48
Non-amortizable intangible assets:
Perpetual track access agreements						35,891
Operating license						106
Total intangible assets, net						$	1,472,376

The Company expenses costs incurred to renew or extend the term of its track access agreements.

During the year ended December 31, 2017, the Company assigned a fair value of $54.2 million to operational network rights in the purchase price allocation of Pentalver. See Note 3, Changes in Operations, for additional information on the Pentalver acquisition. As a result of ongoing changes to the business of one of the Company's railroads, effective January 1, 2017, the Company assigned an estimated useful life of 20 years and began amortizing the intangible asset associated with perpetual track access agreements on this railroad, which was previously considered an indefinite-lived asset. This immaterial change effectively aligns the amortization period for this intangible asset with the approximate weighted-average life of the complementary property and equipment assets of the respective railroad.

During the year ended December 31, 2016, the Company assigned a fair value of $470.6 million to customer contracts and relationships in the purchase price allocation of GRail. See Note 3, Changes in Operations, for additional information on the GRail acquisition. During the year ended December 31, 2016, the Company also recorded an impairment charge of $4.1 million related to a customer relationship intangible asset at ERS. See Note 3, Changes in Operations, for additional information regarding ERS.

For the years ended December 31, 2017, 2016 and 2015, the aggregate amortization expense associated with intangible assets was $57.6 million, $32.9 million and $29.4 million, respectively. The Company estimates the future aggregate amortization expense related to its intangible assets as of December 31, 2017 will be as follows for the periods presented (dollars in thousands):



	Amount
2018	$	57,963
2019	53,132
2020	52,913
2021	52,823
2022	52,823
Thereafter	1,297,264
Total	$	1,566,918

Goodwill

The changes in the carrying amount of goodwill for the years ended December 31, 2017 and 2016 were as follows (dollars in thousands):



	North American Operations			Australian Operations		U.K./European Operations			Total Operations
Balance as of January 1, 2017:
Goodwill, gross	$	632,937		$	339,865	$	167,276		$	1,140,078
Accumulated impairment losses	—			—		(14,482		)	(14,482		)
Goodwill	$	632,937		$	339,865	$	152,794		$	1,125,596
Changes during the period:
Goodwill acquired	4,083			—		11,096			15,179
Acquisition accounting adjustments	(650		)	—		(21,765		)	(22,415		)
Currency translation adjustment	1,640			27,503		18,084			47,227
Balance as of December 31, 2017:
Goodwill, gross	$	638,010		$	367,368	$	174,691		$	1,180,069
Accumulated impairment losses	—			—		(14,482		)	(14,482		)
Goodwill	$	638,010		$	367,368	$	160,209		$	1,165,587



	North American Operations		Australian Operations			U.K./European Operations			Total Operations
Balance as of January 1, 2016:	$	605,234	$	39,312		$	182,029		$	826,575
Changes during the period:
Goodwill acquired	26,969		308,267			—			335,236
Acquisition accounting adjustments	176		168			9,736			10,080
Goodwill impairment	—		—			(14,482		)	(14,482		)
Currency translation adjustment	558		(7,882		)	(24,489		)	(31,813		)
Balance as of December 31, 2016:
Goodwill, gross	$	632,937	$	339,865		$	167,276		$	1,140,078
Accumulated impairment losses	—		—			(14,482		)	(14,482		)
Goodwill	$	632,937	$	339,865		$	152,794		$	1,125,596

The acquired goodwill for the year ended December 31, 2017 was related to the acquisitions of Pentalver in our U.K./European Operations segment and HOG in our North American Operations segment. The acquisition accounting adjustments for the year ended December 31, 2017 related to the correction of the following two errors in accounting for the acquisition of Freightliner, both of which only impacted the consolidated balance sheet. (1) The tax basis in assets acquired at the date of acquisition was £43.8 million greater than the amount the Company used to determine deferred taxes, which resulted in a decrease of $10.4 million in goodwill and a decrease of $10.4 million in deferred tax liabilities. (2) An additional asset for maintenance deposits associated with acquired locomotive operating leases existed at the acquisition date but was not previously recognized, which resulted in an increase to other assets of $13.6 million, a decrease in goodwill of $11.3 million and an increase in deferred tax liabilities of $2.3 million. The Company does not consider these adjustments material to its consolidated financial statements taken as a whole and as such, prior periods were not restated or retroactively adjusted.

The acquired goodwill for the year ended December 31, 2016 was related to the acquisitions of Providence and Worcester Railroad in our North American Operations and GRail in our Australian Operations. See Note 3, Changes in Operations, for additional information regarding the Providence and Worcester Railroad, GRail, Pentalver and HOG acquisitions. The goodwill impairment recorded in 2016 resulted from the write-off of goodwill ascribed to the Company's ERS business within its U.K./European Operations segment. See Note 3, Changes in Operations, for additional information regarding ERS.